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Fund supermarkets more popular

As Thai investors become more aware of online opportunities, Phillips Securities Thailand is looking to double the transactional earnings of its online fund supermarket to Bt4 billion next year, said managing director Suchai Sutasthumkul.

Published on December 6, 2007

The brokerage firm has seen transaction volume grow from Bt700 million in the first year to this year's estimated Bt1.4 billion to Bt1.7 billion, still short of the Bt2 billion set earlier. To be profitable, Suchai said the volume must pass Bt10 billion, since the trading fees earned from each transaction hovered at around just 1 to 1.5 per cent.

Save for funds from Ayudhya Fund Management and BBL Asset Management, once registered, Phillip Fund SuperMart's clients have access to 19 mutual funds now being offered in the market.

Fund supermarkets have been around since the Internet started to gain commercial momentum in developed capital markets. In the US, although a meagre proportion compared to 48 per cent in retirement plans and 37 per cent from sales through financial advisers and brokers, fund supermarkets account for 5 per cent of all mutual-fund distribution channels.

Just to see how advanced other markets are, Fidelity Investments, a leading capital-management company in the US, offers a wide array of 4,600 funds, only 222 of which are theirs, and 420 host suppliers through its online portal.

"If the development of fund supermarkets in Singapore and Hong Kong is indicative, growth will be exponential," said Suchai.

The ease of use and the ability to compare different funds using one's preferred criteria will attract many time-starved clients. For instance, buyers can choose to see only funds with 8-per-cent returns.

With the financial world revolving at a dizzying speed, consumers have to make frequent decisions on the fly, said Siam Commercial Bank's senior officer Jarumporn Chotikasathira, whose bank has started to consolidate various services into one online account.

Although Phillip Securities has no support from a bank, it relies on its agents for its sales. The company is now training batches of insurance agents - 150 life assurance and 200 to 300 non-life - to acquire the necessary licences to sell financial products.

It is a gradual process, but Suchai believes that these insurance agents' customer base is an untapped source of revenue.

Suchai believes that once the government allows individual investors to invest in and hold overseas stocks, his company, with its IT capability and international brokerage network ready, can hit the ground running on the first or second day.

 Ki Nan Tsui

 The Nation


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